Pricing Practice Quizzes

A retailer of Degree antiperspirant prices it at $4.00; it costs the retailer $3.50. What is the approximate markup as a percentage of selling price?

12.5%

Which of the following should be accomplished after developing pricing objectives?

Assessing the target market's evaluation of price

Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?

Evaluating competitors' prices

Which of the following pricing strategies sets the basic product in a product line low, but the price on the items required to operate or enhance it are higher?

captive pricing

The Federal Trade Commission has established guidelines for _______. If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.

comparison discounting

When determining markup as a percentage of cost, divide the markup amount by

cost

Which of the following price bases is mostly likely to be used for commercial construction projects or custom-made equipment?

cost-plus pricing

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.

demand-based

During the hot, humid months of July and August, Pinewood Links Golf Course, located in Georgia, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of

demand-based pricing

Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is heavy business travel, which illustrates _____ pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as _____.

demand-based; differential pricing

In the absence of government controls, pricing is a(n) _______ and _______ way to adjust the marketing mix.

flexible; convenient

Adidas is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

market share

Which of the following bases for pricing is most commonly used by retailers?

markup pricing

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

penetration pricing

If Kashi wants to gain a large market share quickly with its new line of reduced-fat snack crackers, it should use

penetration pricing

Chevrolet's Presidents' Day sales are an example of _______.

periodic

If Albertsons Market advertise 2-liter bottles of Coca-Cola for 89 cents to generate store traffic so that shoppers will purchase other items at regular prices, the grocer is using

price leader

Which pricing strategy provides the most flexible introductory base price?

price skimming

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

reference pricing

Euan is planning three sales during the third quarter of the year at Party City. The first is at a week before Easter, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be

special-event pricing

Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a ____ pricing objective.

status quo

Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products?

status quo

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?

status quo

Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?

25%

Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration?

Competition-based pricing

Which of the following product-line pricing strategies is NOT generally used for business products?

Psychological pricing

Which of the following pricing objectives sets prices to recover cash as quickly as possible?

cash flow

Glenn is shopping for a new coat at Marshalls and finds a North Face down jacket that he really likes. He knows that the North Face brand is considered to be high quality and that it's usually very expensive. He's pleasantly surprised to see the price—the "suggested retail price" is $199 and Marshalls' price is $99. Glenn decides to purchase the coat even though it's a little more expensive than he originally thought he'd spend on the jacket. What type of pricing strategy is Marshalls using to price the North Face jacket and other merchandise?

comparison discounting

When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using ____ pricing.

cost-plus

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing.

differential

A product is a price leader when

it is sold at less than cost in the hope that sales of other products will increase.

ACME Corp. has a pricing objective to increase its primary product's sales relative to total industry sales. This is best described as a(n) _______.

market share objective

Which of the following pricing strategies often results in a retailer losing money on the product?

price leader

When Texas Instruments first introduced its line of graphing calculators, it set the price quite high; it has lowered the price as competitors have entered the market. The pricing strategy initially used by Texas Instruments is called

price skimming

Reference pricing is

pricing a product at a moderate level and displaying it next to a more expensive model or brand

Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater?

product quality

Services that are performed by lawyers, dentists, or doctors are typically priced using ____; sometimes these prices are not based on the amount of time that is spent in each situation, but are based on a flat fee regardless of the difficulty involved.

professional pricing

A price-skimming strategy assumes that

the initial demand is highly inelastic.

Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _______.

yield management

Scenario 20.1 Use the following to answer the questions. ​ Suppose that Maui Jim is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical sunglasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Maui Jim lines that are sold through specialty stores. In determining the price for this sunglass line, Maui Jim wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 20.1. Given Maui Jim's plan for positioning the new sunglass line, it should use a ____ strategy when introducing its new product.

price-skimming